The novel coronavirus that has swept across the globe has changed the world. This article will articulate how it has changed marketing, and specifically, leadership in marketing departments. Whilst this is not as important as the death and devastation the virus has caused, it is important for us marketers to know how our industry is changing.
Businesses are very careful with their money at the moment. And rightly so. It is natural for businesses or individuals to tighten the purse strings when there are such high levels of uncertainty. This being said, businesses know they cannot stop marketing. Marketing makes growth and if you are not growing you are dying. Businesses are still committed to having world-class marketing leadership but have to take in cost considerations due to the new economic landscape.
The three ways a Fractional CMO, a part-time CMO, has an advantage over a traditional full-time CMO in a post-COVID-19 marketing industry are all cost-related.
1. Businesses are wary.
Right now chief executive officers are about as wary as a deer hearing a twig break. The predator is the loss of revenue, or worse, bankruptcy. As a result of this uncertain future CEOs do not want to commit to a costly chief marketing officer. This is a position that easily costs businesses a six-figure salary, often over $200,000 per year, plus benefits. That scares business owners right now, considering that the position of chief marketing officer has the highest turnover rate of all c-suite level positions. This coupled with the looming threat of recession means that bringing in a full-time CMO is simply too risky right now.
However, businesses need marketing. They need to run effective marketing campaigns in order to grow their revenue. In order to run marketing campaigns, they need marketing leadership. This leadership comes in the form of a marketing director or chief marketing officer. It creates a bit of a Catch-22 situation. The question begs: how can a company hire a marketing leader whilst mitigating the cost risk of hiring a marketing leader? The answer is to bring in a Fractional CMO. A Fractional CMO is brought in on a contract basis.
Normally an initial three-month commitment and then a rolling contract extension either month-to-month or continuous three-month commitments. This is what business owners are crying out for right now. If the results are not coming in then there is not a huge financial commitment or severance package to pay.
2. Lower Cost.
Reducing costs is an unfortunate necessity for many businesses right now. This can come in the form of reducing outlay on marketing campaigns or worse, cutting staff. Whilst no business wants to do this, they have to survive. Reducing ad spend comes at a risk of not bringing in new business, so businesses know they have to keep advertising, just do so in a less risky manner.
Marketing campaigns with a solid ROI are strong right now. The cost of a chief marketing officer is high. Therefore, businesses are choosing the cheaper option of bringing in a Fractional CMO. Whilst the hourly rates are roughly the same, a Fractional CMO can be paid only for the hours absolutely necessary for the marketing strategy. This is appealing to businesses as they have an exact commitment that they can keep an eye on.
3. Delegation and keeping the organization lean.
Again, this relates to cost but focusses on the costs being spent wisely. Prior to the pandemic, there were lots of businesses that did not have the leanest marketing departments. It was ok because the strong economy and high revenues were forgiving. Now, however, these businesses are trimming the fat and making sure that every penny is being spent to its maximum. One way this can manifest itself is in having a highly-paid role doing tasks that a lower-paid employee can also easily do. This can be seen, for example, having a chief marketing officer writing a newsletter email. The hourly cost for writing that email is two or three times as much as it could be. This is something that companies and CEOs are really switched onto right now. Business owners want zero unnecessary labor costs and definitely do not want a top-heavy organization.
Bringin in a Fractional CMO means that business leaders can ensure the marketing department stays trim and has the right people in the right seats. They need marketing leadership and strategy. This is unquestionable. But, they need to be paying the CMO for that and that only. Which is why the Fractional CMO is paid for 5 hours per week, for example. Every single minute of those 5 hours is being spent on devising strategy and leading the team. This means the departments can afford to spend more on marketers to do the heavy lifting. Many departments lack manpower and having a part-time or Fractional CMO means that a half or a quarter of the salary of the full-time chief marketing officer can be spent on manpower, in the form of a marketing specialist or assistant.
Cautiousness towards costs is high right now as outlined by the three points made above. If you are interested in bringing a Fractional CMO to your organization or simply interested in learning more, head over to cmox.co for more information.